Sept 26 (Reuters) - U.S. nuclear power generators urged the federal government against taking action in a dispute over imported uranium, arguing tariffs or quotas would increase costs for the struggling industry and possibly cause some reactors to shut, according to a statement emailed on Wednesday.

The U.S. Department of Commerce (DOC) launched a "Section 232" investigation into uranium imports in July following complaints by two U.S. uranium mining companies, Ur-Energy Inc and Energy Fuels Inc, that subsidized foreign competitors have caused them to cut capacity and lay off workers.

The move is a double-edged sword for President Donald Trump. While it helps domestic uranium producers by targeting importers, it undercuts the administration's efforts to give a boost to U.S. nuclear power operators, who would see their fuel costs increase.

"Imposing additional regulatory burdens on the already struggling nuclear energy industry will put 100,000 good paying domestic jobs and careers at risk and is inconsistent with President Trump's and the Department of Energy's policy pronouncements," David Tamasi, spokesperson for nuclear group, called the Ad Hoc Utilities Group (AHUG), said in a statement.

The White House has been trying to find a way to prevent additional coal and nuclear plants from shutting, which the administration sees as vital for national energy security, as they struggle to compete with cheaper alternatives like natural gas and renewable generation.

Uranium is used in the U.S. nuclear arsenal and powers the Navy's nuclear aircraft carriers and submarines, along with 98 U.S. commercial nuclear reactors that produce 20 percent of the electricity consumed in the country.

The nuclear industry said a diverse uranium supply is essential to keep that power flowing.

In 2017, about 58 percent of the U.S. uranium supply came from the United States, Canada and Australia, with the rest coming from Russia (16 percent), Kazakhstan (11 percent), Uzbekistan (5 percent), Namibia (5 percent), South Africa (2 percent) and Niger (2 percent), according to the nuclear power group.

"If the U.S. uranium mining industry does not survive, we will essentially hand over to unfriendly countries control of our nuclear sector," Jeffrey Klenda, president and CEO at Ur-Energy, and Mark Chalmers, president and CEO at Energy Fuels, said in a joint statement.

"The DOC investigation represents a significant step toward protecting our national and energy security," the two company executives said in the statement.

The investigation, which the Commerce Department said on Wednesday is still ongoing, is one of several launched by the Trump administration under Section 232 of the Trade Expansion Act of 1962, previously a seldom-invoked Cold War-era law.

Probes on steel and aluminum imports have led to tariffs and quotas on the metals, prompting retaliation from trading partners including Canada, Mexico and the European Union.

Reporting by Scott DiSavino in New York, additional reporting
by Swati Verma in Bengaluru; editing by Marguerita Choy and
Diane Craft